Item B: Update on Street and Lighting Fee Development

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council may direct a different net annual revenue target depending on the outcome of efforts to implement other funding package elements. Staff has evaluated and estimated example rates and fees contained in Attachment B based on the previous council-specified revenue target, resulting in an estimated monthly fee for a typical single-family home of approximately $4.50. Street and Bike Path Lighting Fee Development The intent of the street and bicycle path lighting fee is to provide a utility-based funding mechanism to pay for benefits to city residents and businesses provided by street and path lighting. The fee as proposed by the subcommittee was generally framed as recognizing the common benefit of arterial and collector lighting while differentiating among levels of service provided to different areas of the city, with details for implementing the fee to receive further definition and refinement through development of an implementing ordinance and methodology. A range of policy choices and alternatives exists for development of the fee as summarized below and outlined in more detail in Attachment C. Fees to fund operation, maintenance and enhancement of the lighting system could be levied on all occupants of properties benefited by the City’s street and bicycle path lighting services. As a fee for services, it would be imposed on both public and private agencies and businesses. Typically, the person responsible for paying a premise’s water and sewer utility charges would be responsible for paying the street light fee which in most cases is the occupant of improved property. Undeveloped properties would be exempt. The revenue from the fee as recommended by the subcommittee would be dedicated to provision of street and bike path lighting, with a target net annual revenue of approximately $850,000, resulting in an estimated cost to an average household of approximately $1.50 per month. The subcommittee also discussed the potential for a process by which neighborhoods could request and pay for a higher or lower level of lighting service. Key considerations and staff recommendations for determining the amount and structure of the lighting fee include: Determine revenue requirements, uses and limitations on funds derived from the fee. ? Recommend restricting uses to expenditures related to the lighting system and consider operation and maintenance requirements in the initial revenue target for the fee. Determine criteria, if any, for including capital project funding in the allowable uses of funds. ? Recommend including the potential for capital rehabilitation and upgrades within allowable uses and use existing capital project funding sources and methods to fund construction of new street lights. Consider potential methods and implications of accounting for differing levels of service of local ? area street lighting. Allow for at least two methods in the draft ordinance: either a system-wide flat fee or a multi-level rate structure recognizing differing levels of service. A two-level fee recognizing the system-wide benefit of arterial, collector and bike path lighting and the existence or lack of local area street lighting is initially recommended. Evaluate policy options for neighborhood areas to request differing levels or “opt out” of local ? street lighting service. Recommend structuring the draft ordinance to allow for this possibility and that staff identify options and return to the council with potential criteria and costs for implementing an administrative program. Establish rate structures for residential customers. Recommend implementing a flat rate structure ? using a per dwelling unit basis (e.g., standard fee for all types of dwelling units). F:\CMO\2007 Council Agendas\M071121\S071121B.doc